How do creator royalties work?

What are creator royalties on NFTs?

Creator royalties allow artists and creators to receive a percentage of future sales of their work on Gamma's secondary marketplace. Royalties apply only to secondary sales and not to primary mints, where the entire sale goes to the creator, less the commission Gamma charges for use of its minting platform, if applicable.

How do royalty payments work?

Once a royalty is defined on the sale of a creator's work, each time a transaction is completed (i.e. once a listed NFT is sold) on Gamma, the defined royalty percentage will be automatically delivered to the artist's address. There is no need to "claim" royalties or to otherwise maintain the royalty configuration, except in cases where the creator would like to update the address where funds are directed, or to change the percentage to apply to future sales. Due to the nature of the blockchain, royalties cannot be applied to past sales or updated to account for past sales. Please note that not all marketplaces support royalties on Ordinal inscriptions. 

Can creators set custom royalties?

Yes, creators can set custom royalties both for their Ordinals collections and Stacks collections.

While the creator receives the majority of the funds from a collection's initial mint, it is the sellers of the collection's NFTs that receive the bulk of the funds on secondary sales since they now own the NFT.  However, the creator can request to receive a portion from all secondary sales based on the percentage fee set as creator royalties for that collection.

A default royalty percentage will be defined on deployment unless otherwise specified by the creator. This default number can certainly be altered or removed, or raised to some larger amount. Please note that royalties considered "too high" by the community may discourage secondary trading of the NFTs or may encourage private trading to circumvent royalty payments, which is a potentially dangerous activity that leaves users more susceptible to scams and other mistakes.

If you'd like to update your royalties on an Ordinals collection you launched, feel free to follow the steps described in this video around the 3 minute mark.

Follow this guide to update royalties on your Stacks collection, and this guide for Ordinals collections.